Sparks v. West Point Manufacturing Company

LAWSON, Justice.

The question in this case is whether a domestic corporation, in computing its net income for state income tax purposes, is authorized by the provisions of § 402(6), Title 51, Code 1940, to deduct dividends received from a foreign subsidiary corporation of which it owns as much as fifty per cent of the capital stock, which subsidiary did no business in Alabama nor paid any income tax to the State of Alabama.

The trial court answered the question in the affirmative in accordance with the contention of the taxpayer, West Point Manufacturing Company, and the Commissioner of Revenue…